£6m Marble Arch Mound is the tip of an iceberg of money wasted by the former Conservative leadership of Westminster Council on Oxford Street.
An independent review into previously Conservative-run Westminster Council’s Oxford District (OSD) programme has revealed that the Tories squandered £34m of its £150m budget in delivering just two of its 32 projects before Labour took control of the City in May 2022.
Concerned by the mounting costs of the programme and the lack of tangible delivery, the new Council leadership asked Mike Cooke, former CEO of Camden Council, to conduct an independent review. He was tasked with examining the procurement of the design and build contract and the governance of OSD to see what lessons could be learned. He will present the report and his findings at Westminster Council’s Scrutiny Committee tonight (see https://committees.westminster.gov.uk/ieListDocuments.aspx?CId=504&MId=6082)
The OSD was set up in 2019 with a budget of £150m to deliver a series of public realm projects in and around Oxford Street. The Independent Review criticises the Conservative councillors’ decision to procure the whole programme from single contractor using an expensive and inflexible design and build model.
When the Conservative Council leadership subsequently directed resources to build the Marble Arch Mound, the OSD programme could have been scaled back. But instead, it was left with idle resources, for which the Council was still being charged, but with no direction or priorities. The then Council leadership was distracted by the fall-out from the decision to build its ill-fated £6m artificial mountain and paralysed by indecision ahead of the 2022 Council Elections, fiddling while local taxpayers’ money burned.
The Independent Review shows that until July 2022, the OSD had spent:
· £16m on work delivered comprising glossy strategy documents with just two of the 32 proposed schemes actually begun: the Photography Quarter and temporary pavement widening on Oxford Street West.
· £8m on contractual operating costs (overheads) billed on top of the other costs as a retainer by the prime contractor irrespective of any work being done. This included £80K per month on renting a barely used office throughout the pandemic.
· £6m on the Mound.
· £4m was spent on design and preparatory works for future projects.
The review criticises the previous administration for its poor financial controls which meant that “identifying the allocation of the costs between the various elements of the programme has proved to be very challenging for officers.”
The new Labour administration has since refocused the programme to concentrate on Oxford Street itself. It has implemented new governance including a steering group chaired by Geoff Barraclough, Cabinet Member for Planning and Economic Development and a stakeholder group including West End businesses, residents and TFL.
The Independent Review endorses the new approach, stating that “this refresh and refocusing appears to be being effective (including in reducing the programme overhead costs) and in my view appears to be an appropriate response.”
Geoff Barraclough said: “The Marble Arch Mound was just the tip of the iceberg. We inherited an Oxford Street programme that was out of control and over budget. It spent £16m just on the Photography Quarter and temporary pavement widening on Oxford Street West. £8m was consumed by overheads including £2.2m on an office (during the pandemic) and £1.5m by a sub-contracted communications team.
The former, Conservative, leadership of the Council should apologise to the residents for wasting so much money. Their already tattered reputation for sound financial management has now been demolished, like their ill-fated mound.
He went on: “OSD included 32 public realm projects and was so large it was undeliverable. We’ve reduced the scope to focus on Oxford Street itself, implemented new governance, set up rigorous cost controls, taken an axe to overhead spending (including cutting office costs by 86%) and are involving local businesses and residents at every step. Detailed design work is now underway and we will be announcing new, detailed plans for Oxford Street in the Spring.”